Alabama Business Law Exam - Additional Practice
Exam – Q’s and A’s
What is the main weakness of the cash basis accounting method? - -It does
not match revenues with expenses.
-When does the cash basis accounting method record income? - -When
cash is received
-When do you report income with the Cash Basis Method of accounting? - -
You report income in the year you receive it and deduct expenses in the year
you paid them.
-What is a contract surety bond? - -An agreement that binds the contractor
to comply with the terms of a contract
-What is the purpose of a Bid Bond? - -A guarantee that states the builder
will do the work for the bid price, will sign the contract and will furnish a
performance and payment bond.
-Which type of bond is a risk transfer mechanism between at least 3 parties?
- -A Surety Bond
-What is a Payment Bond? - -This bond guarantees that the contractor will
complete a contract within its time frame and conditions.
-The law that requires a payment and performance bonds on Federal
projects over $100,000? - -The Miller Act
-Most states and local governments also have surety laws on public works
projects similar to the Miller Act that are referred to as what? - -Little Miller
Acts
-What can you also use to estimate labor costs? - -Published labor rates
-What is considered the most accurate method of estimating? - -The
Quantity Take-off Method
-Equipment needed to complete the job, figured as a direct cost of the
project, and should be added to your estimate is known as what? - -Project
Equipment Cost
-Estimating bundles of all cost factors (labor, materials, equipment etc) to
come up with a unit price for the entire task is known as what type of
estimating method? - -Unit Price Method
Exam – Q’s and A’s
What is the main weakness of the cash basis accounting method? - -It does
not match revenues with expenses.
-When does the cash basis accounting method record income? - -When
cash is received
-When do you report income with the Cash Basis Method of accounting? - -
You report income in the year you receive it and deduct expenses in the year
you paid them.
-What is a contract surety bond? - -An agreement that binds the contractor
to comply with the terms of a contract
-What is the purpose of a Bid Bond? - -A guarantee that states the builder
will do the work for the bid price, will sign the contract and will furnish a
performance and payment bond.
-Which type of bond is a risk transfer mechanism between at least 3 parties?
- -A Surety Bond
-What is a Payment Bond? - -This bond guarantees that the contractor will
complete a contract within its time frame and conditions.
-The law that requires a payment and performance bonds on Federal
projects over $100,000? - -The Miller Act
-Most states and local governments also have surety laws on public works
projects similar to the Miller Act that are referred to as what? - -Little Miller
Acts
-What can you also use to estimate labor costs? - -Published labor rates
-What is considered the most accurate method of estimating? - -The
Quantity Take-off Method
-Equipment needed to complete the job, figured as a direct cost of the
project, and should be added to your estimate is known as what? - -Project
Equipment Cost
-Estimating bundles of all cost factors (labor, materials, equipment etc) to
come up with a unit price for the entire task is known as what type of
estimating method? - -Unit Price Method
